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Bitcoin Dips to $500 After China Blocks New Deposits

China's clampdown on Bitcoin continues, and the virtual currency's prices keep plunging. As of early morning on Wednesday, the price of Bitcoin went down to around $500 across major exchanges, its lowest in nearly a month.

As a result of these regulations, which put into question the viability of Bitcoin as a currency in China, the global price of Bitcoin has dipped to less than $500, after it hit $1,000 just three weeks ago.

The chart below, from Blockchain.info, shows the plunge in Bitcoin price as a result of China's clampdown.

On Tuesday, the People's Bank of China asked 10 of the largest Chinese third-party payment companies, which account for half of all online transactions in China, to stop dealing in Bitcoin, according to local news reports, a move that will effectively block new deposits of bitcoin into local exchanges.

BTC China, the world's largest Bitcoin exchange, confirmed on Wednesday with a post on its official Sina Weibo account that it would no longer accept deposits in the Chinese currency yuan, as a result of the latest ban.

BTC China's co-founder Bobby Lee later confirmed the news to the Financial Times. "As of right now, we have received notice from our third-party payment company that they will disallow customers from making deposits into our exchange," he said.

With financial institutions banned from processing bitcoin transactions and with this new ban on bitcoin deposits through third party vendors, it is now virtually impossible for Chinese Bitcoin users to buy new bitcoins.

The price of Bitcoin skyrocketed last month in large part due to Chinese users flocking to buy the cryptocurrency and jumping on its global bandwagon. These latest bad news might cause Bitcoin prices to keep dipping, making Cameron Winklevoss' prediction that Bitcoin might hit $40,000 even more unlikely to ever come true.

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